- Wednesday, April 24, 2024
By: Shubham Ghosh
THE global sugar supply balance is likely to take a hit in the 2021-22 season which kicked off in October due to higher use of sugarcane for producing ethanol in India and lower yields in Brazil, StoneX, a New York-based institutional-grade financial services network, said on Tuesday (30).
The season is set to witness demand surpassing production for the third straight year, StoneX said, projecting a whopping supply deficit of 1.8 million tonnes, which is a million tonnes more than what it estimated in October, Reuters reported.
StoneX said the demand has improved recently as prices of ocean freight have gone down, Reuters said, adding that the network saw higher buying from countries in Asia and refining hubs.
India has seen production of a record amount of sugarcane after a positive weather but at the same time, the country’s ethanol-blending programme will take the equivalent of three million tonnes of sugar out of the market, StoneX said, resulting in a sugar production that will be almost the same as in the previous crop or around 31 million tonnes.
In Brazil, production of sugar in the country’s central-south region has been recorded to be at 31.3 million tonnes, which is 12 per cent less than that a year ago. StoneX though said that the new sugar season in the Latin American country, which begins in April, will see a six per cent improvement on total sugarcane volumes to more than 565 million tonnes.
Meanwhile, sugar production in the European Union and the UK area is expected to go up by 12 per cent in 2021-22 to more than 17 million tonnes as a rainier summer in Europe boosted beet yields, Reuters added.
